SENATE BILL REPORT

SB 6409

As Reported by Senate Committee On:

Higher Education & Workforce Development, February 2, 2010

Title: An act relating to creating the Washington investment in excellence account.

Brief Description: Creating the Washington investment in excellence account.

Sponsors: Senators Kastama, Rockefeller, Shin and Kohl-Welles.

Brief History:

Committee Activity: Higher Education & Workforce Development: 1/27/10, 2/02/10 [DPS-WM, DNP, w/oRec].

Majority Report: That Substitute Senate Bill No. 6409 be substituted therefor, and the substitute bill do pass and be referred to Committee on Ways & Means.

Signed by Senators Kilmer, Chair; Kastama, Vice Chair; Jacobsen, McAuliffe, Shin and Tom.

Minority Report: Do not pass.

Signed by Senators Pflug and Stevens.

Minority Report: That it be referred without recommendation.

Signed by Senator Hewitt.

Staff: Aldo Melchiori (786-7439)

Background: Legislation creating Washington's lottery was approved during a 1982 special session of the Legislature called to deal with a projected budget deficit. The bill required that the state general fund receive the state's share of the revenue. In 2000 Washington voters approved I-728 (the K-12 2000 Student Achievement Act), which redirected lottery revenue contributions from the state general fund to education funds beginning July 1, 2001. On April 3, 2002, Governor Gary Locke signed legislation which allowed Washington's lottery to join the multistate lottery Mega Millions effective June 2002.

Profit from all lottery games must benefit education up to the level of $102 million annually. Once the $102 million contribution level for education has been reached, any additional net revenues from Mega Millions benefit the general fund while other lottery games continue to benefit education. From July 1, 2004, to July 1, 2009, all lottery net revenues allocated for education were sent to the education construction fund to help build, renovate, and remodel schools throughout the state.

In 2009 the Legislature redirected lottery dollars for education as well as economic development contributions to the state general fund to support a range of state programs, including education. On July 1, 2009, lottery funds were redirected from the education construction fund to the general fund for the 2009-11 biennium. Also in 2009 the Legislature approved the sale of the multi-state game Powerball. While the education construction fund has been lottery's largest beneficiary, the lottery has been directed by the Legislature to make contributions to stadium funding and problem gambling prevention and treatment.

Summary of Bill (Recommended Substitute): The Washington investment in excellence account is created. After July 1, 2010, all money in the state lottery account must be placed in the Washington investment in excellence account.

A minimum of 2 percent of the expenditures from the account must be used to recruit entrepreneurial researchers, innovation partnership zones, and research teams. The remainder must be used for higher education financial aid programs including opportunity grants, educational opportunity grants, state work study, GET ready for math and science scholarships, passport to college promise, college bound scholarships, and the Washington promise scholarship.

EFFECT OF CHANGES MADE BY HIGHER EDUCATION & WORKFORCE DEVELOPMENT COMMITTEE (Recommended Substitute): Funds may also be used to fund the state work study program. A technical change is made to conform a potentially conflicting statute.

Appropriation: None.

Fiscal Note: Available.

Committee/Commission/Task Force Created: No.

Effective Date: Ninety days after adjournment of session in which bill is passed.

Staff Summary of Public Testimony on Original Bill: PRO: Higher education is essential for the personal growth of our citizens and the economic growth of the state. The marketing used in other states encourages sales as a benefit to higher educational attainment and access. The scholarships included in the bill target students that need financial help to fulfill their goals. This will help enhance research opportunities for graduate students. It provides an opportunity for students to become contributors to our state's economic recovery. The state's long-term growth depends on higher educational attainment.

OTHER: This is one way for the state to provide dedicated funding for financial aid.

Persons Testifying: PRO: Senator Kastama, prime sponsor; Jamie Moore, WA Student Association; Sarah Reyneveld, Graduate and Professional Student Senate; Tommy Bauer, John Wheeler, Associated Students of UW-Tacoma; Sherry Burkey, WWU; Ann Anderson, CWU; Margaret Shepherd, UW; Chris Thompson, HECB; Julie Suchaneck, TESC.

OTHER: Jacque Coe, Arlen Harris, WA State Lottery.